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Throw it away or put it in your pocket?

Since the advent of computerisation there have been early adopters, those who wait and see before taking up the technology, and those who wait until there is no alternative.

To adopt or not to adopt, that is the question

Small Business in Australia has an enviable reputation and has been generally quick to adopt new systems and processes as they are developed. There are pockets within the sector where early take up is not so obvious, but they are generally the exception rather than the rule.

There are two issues which arise from technology. Depending on your bias, you might accept or reject these issues as fact.

The first; where technology is ignored, the competitive position is weakened. The second; early adopters who rush to update often see the expected cost savings evaporate.

In this article we will look at what might be typical scenario for a small business which has the owner or an employee having responsibility for among other things, bookkeeping and payroll.

The Definition: A very good place to start

Bookkeeper

  • “a person whose job is to keep records of the financial affairs of a business.”       
  • ‘the administration manager fills the role of Bookkeeper’
    ‘my business had grown enough to justify hiring a Bookkeeper.’

Notwithstanding the definition, it seems “bookkeeper” is a word which, like the word “accountant”, seems to have been claimed by and for anybody who records an amount at anytime, anywhere, in any business.

Payroll Manager

“a person whose job it is to manage the calculation and payment of salaries and wages, and to maintain employee records, in line with complex government legislation and industrial awards.”

‘the bookkeeper also has responsibility as the Payroll Manager’
‘our receptionist performs the functions as our Payroll Manager’

Is it any wonder then, that a highly skilled Bookkeeper and Payroll Manager is often confused with a relatively untrained employee who has sufficient skill to record a simple transaction?

Houston, we have a problem

The first step to resolving a problem is to acknowledge THERE MAY BE A PROBLEM.

The specific issue in this scenario concerns potential for inefficiencies and costs blowout with the introduction of cloud and server-based systems and processes.

It’s worth noting that many of the conclusions apply equally where advances have been ignored totally or in part.

Here’s a few easy things to consider.

Each time you adopted new software did you consider other functions within your business?
When you decided to adopt a particular solution, did you compare more than just the cost?
Do all your employees who should use the solution you pay for, use it as they should?
When the software is used properly, have the promised savings or productivity increases eventuated?

If the answer to any of these questions is “no” or “not really” is it time for a review to help you understand how you could get a better result?

The second step is to acknowledge you can only be TOO BUSY for so long before it all catches up and overwhelms you.

Are you too busy because you have not adopted technology?
Are you too busy because you have adopted technology but have the wrong solutions?
Are you too busy because your staff can’t or won’t use the tools in the way they should?
Are you too busy trying to find new customers while you choose to ignore the inefficiencies you don’t understand?
Are you too busy to be concerned about the consequences for ignoring or misunderstanding government regulations?

If the answer to any of these questions is “yes” or “sort of”, will you still be too busy next week or next month?

The Myths

Everybody, including accounting software suppliers, has something to sell. And the easiest way to sell something is to convince the buyer that they will get a cheap, easy solution to all their problems.

Here’s a few samples of the promises that have been made in relation to accounting software.

“reconcile in seconds. Imports and categorises your latest bank transactions. Just click OK to reconcile”

“login online anytime, anywhere ……. to get a real-time view of your cash flow”

“automate bank feeds, sin quotes and invoices, track sales and expenses, scan receipts and pay employees”

“see your profit and loss, balance sheet and dozens of reports in one click”

“the next generation of online accounting software is here. And it’s breathtakingly simple”

“is the most intuitive, full featured accounting software….”

“… designed to keep your business on track and prevent errors”

Really? Even if your understanding of accounting, bookkeeping or payroll, and the legislation that goes with it, is rudimentary or out of date? And how reliable is it if all the required information hasn’t been entered into the system?

We should perhaps be mindful the software companies want you to buy their product and their marketing is very sophisticated. Their sales techniques are very good.

Of course, what they won’t tell you is their product has been designed based on what they think is the best answer for most businesses. They won’t say that their product works best only in particular circumstances. They won’t say that their competitor’s product has features which might better suit your business and the way you like to work.

That’s not to say their solutions are anything other than very good. Some better than others of course.

And it’s not to say that some of the features they offer won’t make things easier, cheaper and more efficient.

It is simply that they won’t say a lot of things you really need to know.

They will just perpetuate the myth that their product will suddenly make your life easier.

The Consequence of the Problem

Every business relies on a very simple formula in order to stay profitable enough to maintain market share.

  1. Income minus
    Cost of Sales minus
    Expenses equals
    Profit

Profit is the bit we all strive for to maintain a lifestyle for to reinvest to grow a business.

Wait and See: The competitive position is weakened

Many business operators are extremely capable when it comes to managing the costs from suppliers. Those same operators are often very zealous in controlling their direct costs, which will include the cost of labour. It’s not to say they’re not fair-minded people, it’s simply a recognition that access to the bank account is not open-ended.

To be fair to those who wait and see, we must recognise that not every piece of new technology has utility for everybody, even if it is designed extremely well. The flipside is that it is a very rare business that cannot in some way improve its bottom line with the adoption of the right systems.

As a generalization, we might surmise that business owners who prefer to wait and see are very good at identifying efficiencies when they understand the issues and processes in front of them, but are not so willing to control the circumstances where they do not understand the functions which will be impacted by any proposed change.

For the purpose of illustration, when two “identical” businesses are compared they would be equally profitable and equally competitive in the marketplace.

Where one fully adopts technology which reduces the amount of time required to complete a function, that business immediately either has a lower wages bill or additional staffing resources to pursue new business.

That business now has the luxury of either taking greater profits or more likely, offering their customers a lower price, and thereby increasing their potential to grow sales.

In those circumstances, the businesses are no longer “identical”, and one has the competitive advantage.

Early Adopters: The expected cost savings evaporate

There are any number of reasons why Australians are so keen to adopt technology ahead of the rest of the world. Australian business is no different.

From the very early days of personal computing, developers have designed useful tools to replace manual systems. It’s doubtful anybody believes other than; the advent of computerisation has reduced the amount of time required to complete almost every task.

Early systems, as good as they were, replicated manual systems in an electronic format. Anybody who was familiar with the manual systems could generally still understand the underlying process. As a result, where time was saved it was easily identified and adjustments could quickly be made.

As we fast forward to today the rate of technological change, and the areas within business where it is possible to make change, has rapidly expanded to a point where very few understand the full impact. Even in very small businesses.

The people who operate in a busy environment understandably reach out for tools which make the task at hand much simpler.

As one task is simplified, the attention turns to another. In the circumstances it is not unusual for a business owner to act on a recommendation of “a mate” or indeed “Dr Google” to resolve a major bottleneck.

There are a few things that are clear from this approach,

the business has numerous software solutions which each perform a specific function, but have little or no wider functionality or integration,

there is no growth path available within their choice of solutions,

the business has an inappropriate or costly solution which is well in excess of their short and medium term requirements,

the business has invested in a comprehensive system but does not understand what is necessary to obtain the full benefit,

the business has a solution which only addresses some of the bottlenecks.

The consequences here are more complex. And because the more complex they are more prone to be “swept under the carpet”.

Without delving into a deep and dull analysis, let’s accept there are two broad areas of cost which result. Overinvestment and a failure to save. Both impact the bottom line, and both impact the competitive advantage.

Direct Costs

How these costs impact an individual business will vary, depending on the size of the business and depending on the work required.

For the sake of simplicity, we’ll assume a paid bookkeeper earns $55000 per year. When all the additional costs (SGC, Insurances, Annual Leave, Personal Leave, Long Service Leave etc.) are added, the full cost to the business will be closer to $70000.

Would it surprise you to know the accross business system might cost as little as $55000 per annum - IN TOTAL? And as a bonus, you get better information to help you run your business every week of the year.

You might well ask how can that be?

Simple. We’ll use the right people who have the right knowledge, access to the right level of continuous training and the right tools. There will be no time wasting or additional costs while we resolve complex questions.

What will you do with the extra money?

The Solution

Typically, your solution can be simple, or it can be complex. The good news is that in every instance there is a simple first step.

All you have to do is pick up the phone, dial 0419976705 and have a no cost 15 minute conversation with Kieran May.

In that time you will both learn enough to know how to proceed.

But why Kieran May? Does he have all the answers? Can he save you money?

If Kieran is one thing, he is straight down the line.

He may or may not immediately have all the answers for you and your circumstances. And, while it is likely he will save you money, if he can’t help you reduce your costs or grow your revenue, you won’t pay him a cent.

But he knows enough right now to work with you to understand your business, how you like to work and what measures you use for success.

And that’s a great place for you to start to regain control of your business.

Kieran May, Clear Thinker, Automates Business Systems, Simplifies Compliance

accross business takes an interesting look at more than cloud solutions to save you time and money.

SAVES YOU TIME | SAVES YOU MONEY | YOU DECIDE HOW TO SPEND IT

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